TELECOM INDUSTRY

Pragya Mishra
Rajib Ganguly
Saiba Kapoor
Shweta Jobanputra
Sneha Khawale
Spandana Khanna
Vishal Malhotra
INDIAN TELECOM INDUSTRY -OVERVIEW

 Second largest telecom industry in the world – About Rs 39000

crore in revenues per quarter (USD 32.5 billion per annum)

 Currently the fastest growing telecom industry in the world

 Penetration rate in Urban area- over 100%, Rural area-

around20%

 525 million subscribers, 19 million added every month

 Recent Study by ICRIER, supported by Vodafone has

established that a 10% increase in mobile penetration in a state
leads to 1.2 % increase in that state’s GDP.
 INDIAN TELECOM INDUSTRY -
OVERVIEW

 Has benefitted from market liberalization policies

 New entrants (December 2009) – MTS, Uninor

 Price wars have erupted with the introduction of

per-second-billing, first by Tata DoCoMo

 Intensity Of Competition is very high at

present.
 SIZE OF THE INDIAN
TELECOM INDUSTRY

 Wireless subscriber base - 525.15 Million

 Fixed line subscription declines to 37.06 Million

 Broadband subscription is 7.83 million

Relative Size Of The Indian Mobile Telecom Industry By Subscribers

Population Of India (1.15bn)

Telecom Subscribers (525mn)

Population Of The USA

(307mn)

Population Of Mumbai
(20.4mn)

Population of
Bangalore(6.4mn)
 Wireless vs. Fixed Line User Base (In Millions Of Subscribers)
600

500

400

Wireless
300 525.15 Fixed Line
506.04
488.4
471.73
456.74
441.66
415.25 427.28
391.76 403.66
362.3 375.74
200

100

37.75 37.73 37.96 37.81 37.66 37.54 37.38 37.33 37.3 37.25 37.16 37.06
0
Jan/09 Feb/09 Mar/09 Apr/09 May/09 Jun/09 Jul/09 Aug/09 Sep/09 Oct/09 Nov/09 Dec/09

Data Source: CMAI Association Of India (Telecom India Daily Portal)

 Industry ARPU By Customer Segment (in Rs.)

1000

900 899 910 904

886 871
850
800 815 807

700

600

500 Prepaid ARPU

Postpaid ARPU
Industry ARPU
400
361 349 350
332
300 291 305 297
283 287 272 274
250 245 247
229
200 204

100

0
Q2-2008 Q3-2008 Q4-2008 Q1-2009 Q2-2009 Q3-2009 Q4-2009 Q1-2010

Data Source: Vodafone India

 WIRELESS TELEPHONY – TOP 5
PLAYERS

 Top 5 Players (GSM)  Top 5 Players (CDMA)

• Bharti Airtel • Reliance Comm

• Vodafone • Tata Teleservices
• Idea Cellular • BSNL
• BSNL • MTS (Sistema Shyam)
• Aircel • HFCL Infotel
 Distribution Of Wireless Marketshare
(December 2009)
1% 1% 1% 0% 0% 0% 0%
6%

23% Bharti Airtel - 22.63%

11% Reliance Telecom - 17.86%
Vodafone Essar - 17.40%
BSNL - 11.97%
IDEA - 10.97%
Tata Teleservices - 10.92%
Aircel - 5.91%
11%
MTNL - 0.87%
MTS (Sistema Shyam) - 0.58%
Loop Mobile - 0.50%
Uninor - 0.23%
18%
HFCL Infotel - 0.06%
MTNL - 0.06%
12%
Total Telecom (STel) - 0.03%

17%

Data Source: CMAI Association Of India (Telecom India Daily Portal)

 Regulatory Body- TRAI
Telecom Regulatory Authority of India Act, 1997

Telecom Regulatory Telecom Disputes Settlement &

Authority of India Appellate Tribunal

• Primary regulatory entity • Amendment in 2000

• Composition: 1 Chairman, 2 whole • To adjudicate disputes and dispose of

time members, 2 part time members appeals

• Functions • Between a between a licensor and a

Recommendation to government licensee; between two or more service
Enforce compliance providers between a service provider
Investigation and issuing directions and a group of consumers.
 TELECOM-MOBILE
MANUFACTURING
 The cell phones industry has shown a remarkable growth in the last decade
in India.

 In 1989 the number of its subscribers was zero in India.

 In the mid-1990s, India had just 10 million mobile and landline

connections.

 Growth soared in the last four years due to regulatory change and falling
costs of calls and handsets.

 India’s wireless market is a test bed for alternative infrastructure, handsets,

billing systems, business models and marketing strategies that will likely
prove applicable to other developing countries.
 TELECOM-MOBILE MANUFACTURING
 Tele-density in the country is 17.45%. Fewer than eight in every 100
Indians use mobiles compared with China's 30 per cent.

 Lack of investment in the infrastructure needed to support landline services

means there are only 50 million fixed-line users in the country,

 Indian cellular market would account for 11% of the overall Asia Pacific
and Japan market by 2011 and is expected to reach 500 million subscribers
with CAGR of 33.7% for 2004- 2011.

 India’s mobile handset market touched 100.9 million units in the year 2010,
recording a growth of 6.7% from 94.6 million units in the previous year
2009.
 TELECOM-MOBILE
MANUFACTURING
 India is evolving from handset market to a manufacturing destination.

 Due to growing need for localising products, and keeping pace with the
market, many international companies have established their manufacturing
facilities in India.
TELECOM-MOBILE
MANUFACTURING
TELECOM-MOBILE
MANUFACTURING
 TELECOM-MOBILE MANUFACTURING

Analysis of Growth:

 India added 130 million new customers in 2008-09, the largest globally.

 The country’s cellular base witnessed close to 50 per cent growth in

2008, with an average 9.5 million customers added every month.

By April 2009, the total number of telephone connections reached

441.47 million. With this growth, the overall teledensity reached 37.94
at the end of April 2009.

According to Business Monitor International, India is currently adding

8-10 million mobile subscribers every month.

It is estimated that by mid 2012, around half the country's population
will own a mobile phone.
TELECOM-MOBILE MANUFACTURING
Analysis of Growth:
 This would translate into 626 million mobile subscribers, accounting for a
tele-density of around 51 per cent by 2012.

 While 1292.33 lakh connections were added during the twelve months of
2008-09, about 108 lakh connections were added every month during the
2009-10 fiscal year.

 The teledensity has shown a sustained increase during last few years.

 It increased from 26.22% in March 2008 to 36.98% in March 2009.

 Rural teledensity has shown a noticeable improvement in 2009.

 MOTOROLA

Motorola Mission Statement: Motorola Vision

"We are a global
communications leader
powered by a passion to invent
and an unceasing commitment
to advance the way the world
connects. Our communication
solutions allow people,
businesses and governments to
be more connected and more
mobile."
Statement:
"Our history is rich. Our
future is dynamic. We are
Motorola and the spirit of
invention is what drives
us."
 MOTOROLA
• It is headquartered in Schaumburg, Illinois. The other major facilities are located
in Plantation, Florida, Beijing, Hangzhou, Nanjing and Tianjin in China, Seoul in
South Korea, Chennai in India, and Jaguariuna in Brazil.

• Revenue of US $ 22 billion (2009)

• Approx employees 53,000 (2009)

 Motorola has unveiled a marketing strategy that is heavy on pricing and

distribution.

 Their strategy is to provide the most affordable handsets for emerging markets,
but with no compromise on form or functionality

 Motorola produces around 1 Million units at its manufacturing facility in Chennai

 Motorola has invested around $100 Million in Chennai.

SWOT Analysis
MOTOROLA
 Motorola strategy
Motorola’s distinctive competencies in R&D domain :
 Focus on simplifying product platforms, enhancing mid and high-tier
product portfolio (Simplify wireless handset platforms and enhance product
portfolio, while reducing the size)

 Cost structure, so as to, accelerate the speed to market with new products.

 Reduction of the number of product platforms that it supports, increasing

emphasis on 3G and smartphone devices.

 Implementing aggressive plans to rationalize both hardware and software

platforms in order to reduce the complexity of the product platforms and
system architectures.
 Motorola strategy (contd…)
Motorola’s distinctive competencies in Marketing domain :

 Increased focus in priority market, including

North America, Latin America and parts of Asia,
including China

 Increased focus in accessories portfolio and

expanding accessory compatibility

 Motorola has patented a mobile phone which

runs on solar power
 MOTOROLA
6σ In Motorola:

•Pioneered the program

• Won Malcolm Baldridge National Quality Award in

1988 and 2002

•Postulates of 6σ doctrine:

I. Continuous efforts to reduce process variation

II. Processes should be measurable, analyzable, improvisable and
controllable.
III. Sustained quality improvement requires commitment from the top
management
 Why 6σ for Motorola?
Why 6σ for Motorola?

 Consistently beaten by foreign firms in the production of higher quality

products at lower costs.

 Takeover of Motorola factory by a Japanese firm that produced Quasar

Television helped produce TV sets with 1/20th of the defects under the
Motorola management.

 Motorola’s own executives admitted “our quality stinks” and they started
taking quality seriously from there on
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